Broadband Communism is just what we need

by Jan Philipp Dapprich

The UK Labour Party is making headlines with its proposal to bring broadband under public control and make it freely available to users, a plan which the BBC has labelled as ‘broadband communism’. While this seems to be intended as a smear, the BBC is actually right that the Labour Party’s demand falls in line with other free public services that communists have long struggled for, including healthcare, childcare, education and so on. Free public services have a positive distributional effect, allowing the working class to access services they might otherwise not be able to afford. But there is also a simple economic reason that some services should be free: there is no or little marginal cost of usage to them. Exploring this argument shows that not only broadband, but much that can be accessed with it should be free. This includes services such as Netflix, Spotify and Steam where users can stream or download movies, music or video games.

Free Broadband ...

The Labour plan would bring the broadband network under public control, see substantial government investment in expanding it and then make high speed broadband freely available to all households. The cost of building and maintaining the broadband network is carried by the state. So spare me any comments about how nothing is free. I get it. It’s not free. The government pays for it. The point is that access is not denied to those unwilling or unable to pay for the fastest connection available. And that’s a good thing.

Why is it a good thing? Well, these people get to use a service that they would otherwise not be able to use. Just because they aren’t able or willing to pay the sometimes outrageously high prices for broadband, doesn’t mean they can’t benefit from it in some way. So clearly for anyone who doesn’t currently have broadband this is a massive plus. You get something which you didn’t have before: fast access to the internet.

Why should other people pay for their broadband? Well, we are paying for it already. The average household in the UK pays over £30 a month to their broadband provider. Some of that money is spend on the broadband network, while some of it is retained by those companies as profit. The amount of money that has to be spend on maintaining the network would not go up significantly if more people with houses already connected to the network accessed it.

I currently pay BT around £50 a month for 50Mbps for my rented apartment. This means my apartment already has a broadband connection installed which can yield 50Mbps and probably more. When I move out of my apartment, should the next tenant not be able to make use of this connection if they are not willing to pay as much as I am (reluctantly)? What would be the point in denying them use of the already established connection? Who would benefit from this? For the most part no one would. The connection would simply go unused and would thus be wasted. Telecommunication companies might have marginally reduced maintenance cost, but since the connection will have to be maintained anyway for potential future customers and most of the miles of cable connecting us to the internet are shared by other users, there really is not much to be gained from this exclusion.

That companies like BT nonetheless don’t provide free broadband to those unwilling to pay £50 for it has a simple reason. If they did, no one would pay £50 and BT thus wouldn’t make any money. On the other hand BT loses absolutely nothing by simply blocking the access of those not paying for it. Well, they might have some cost to do with actually blocking those addresses that previously paid for broadband, but that’s nothing compared to the income they’d lose out on if they made broadband available for free or near marginal cost.

But by taking private companies and the profit motive out of the picture, as Labour is proposing, we get a completely different situation. The government would be building and maintaining the broadband network and could make it freely available to all. The cost involved with running the network would still have to be born, now by the government. But there would no longer be any reason to exclude anyone from the network that isn’t willing or able to pay for it. This is a free lunch situation. By changing how broadband is provided and paid for, we’d be providing free broadband to people who currently don’t have it at no significant extra cost.

… and Netflix for all

The reason that free access makes sense for broadband is that after a significant initial investment, there is little marginal cost of use. The same is true for other public goods which can currently be accessed for free. Constructing and maintaining a park in the city centre might cost the local council a significant amount of money. But that cost doesn’t go up significantly as more people use the park. So why deny people access to it? Of course, councils don’t do that. But with many priced services in the digital realm the situation is similar, so it’s time to rethink how we pay for and access these services.

Consider streaming services such as Netflix. Part of its success comes from Netflix’s recognition that there is little marginal cost to streaming movies or TV series online. So why not allow people to watch as much as they like? But of course, Netflix needs a business model, so they limit this offer to paying subscribers. Nonetheless, the subscription is, even after recent price hikes, a lot cheaper than what people would previously have paid to access the amount of content available on Netflix. But still, there is a significant waste of the potential use of the content on Netflix when it can’t be accessed by everyone. Only want to rewatch your favourite episode of Friends real quick? Well, unless you pay for a subscription you won’t be able to. What’s the point of this waste of human culture?

If it was just Netflix, you might think this is not a big deal. Everyone should just get a subscription and we will all be able to binge watch as many shows as we like. But there is an increasing number of similar services, some competing directly with Netflix such as Amazon Prime, Hulu and Disney+. Other subscriptions are for completely different products such as music or games. At some point people will have to choose which services they can afford to subscribe to and which not. A friend recently told me he is subscribed to 6 different services and I’m sure there is people with a lot more out there. While I wouldn’t pay for any of these subscriptions beyond the two I’m already paying for, I’d definitely check some of them out if they were for free and might get substantial enjoyment out of these.

And it is not just subscriptions. Many digital products have a substantial one-time price that prevents many from using them. Think of computer games, software, e-books. Don’t have MS office through your employer or university? £30. Read a scientific paper in the Journal Nature without institutional access? £9. The Harry Potter e-books? £38. Play Stellaris? £35. And don’t forget to pay for all of the expansions! Such pay barriers create a significant and avoidable waste of knowledge, culture and enjoyment, because no one will pay for all the things they could potentially use. These products – which we collectively nonetheless must pay for in one way or the other – are thus not being used to their full potential.

Full Digital Communism

Now imagine we instead did what Labour is planning to do with broadband. We carry the cost of making films, games, software, books and articles collectively and make them freely available to download. How much better would our lives be? The cost – assuming we’d keep up a similar level of production of these goods – would be the same. But what would we gain? Access to anything, anywhere, anytime. No limits. Want to listen to that song? Great. You can. And without ads. Not sure you will like that new video game? No problem. Just try it out. It’s free. Want to read up on the latest scientific research? You can. Here is the pdf.

Of course, doing this would require that we find new ways of organising and resourcing the production of these goods and services. Funds for the development of new software, the production of new movies etc would have to be distributed through public institutions. But this doesn’t have to mean that some bureaucrat gets to decide what film we get to watch next year. Instead production could take into account both what people liked in the past and what they want for the future. A lot of people liked Tarantino’s latest movie? Here is funding for your next one, Quentin! That video game concept by a new developer looks promising? Why not allocate part of your tax money directly to the development?

The point is that we, as a society, are already allocating resources to the production of all these goods and services. If we find new ways of organising this, we can make them freely available to all. The potential benefits of this in terms of access to culture and knowledge are enormous. Think of it is a cultural renaissance for the digital age.